s. When the interest rate talls, the: A. Asset demand for money decreases B. Tra
ID: 1128657 • Letter: S
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s. When the interest rate talls, the: A. Asset demand for money decreases B. Transactions demand for money increases C. Total amount of money demanded increases D. Total amount of money demanded decreases In which case would the quantity of money demanded by the public tend to increase by the greatest amount? A. The interest rate increases and nominal GDP increases B. The interest rate increases and nominal GDP decreases C. The interest rate decreases and nominal GDP decreases D. The interest rate decreases and nominal GDP increases 44 45· The interest rate will fall when the: A. Quantity of money demanded exceeds the quantity of money supplied B. Quantity of money supplied exceeds the quantity of money demanded C. Demand for money increases D. Supply of money decreases 46. An increase in the money supply is likely to reduce: A. The general price level B. Nominal income C. Money demand D. Interest rates 47. Loans of the Federal Reserve Banks to commercial banks are: A. A liability of the Federal Reserve Banks and of the commercial banks B. An asset of the Federal Reserve Banks and of the commercial banks C. A liability of the Federal Reserve Banks and an asset for commercial banks D. An asset of the Federal Reserve Banks and a liability for commercial banks 48. The conduct of monetary policy in the United States is the main responsibility of the: A. U.S. Treasury B. Federal Reserve System C. Office of Management and Budget D. Bureau of Economic Analysis 49. The fundamental objective of monetary policy is to assist the economy in achieving: A. A rapid pace of economic growth B. A money supply which is based on the gold standard C. A full-employment, noninflationary level of total output D. A balanced-budget consistent with full-employment 50. Which one of the following is a tool of monetary policy for altering the reserves of commercial banks? A. Issuing currency B. Check collection C. Open-market operations D. Acting as the fiscal agent for the Federal governmentExplanation / Answer
43. When interest rate falls the total amount of money demand increases.
44. When interest rate decreases and nominal GDP increases would the quantity of money demanded by the public tend to increase by the greater amount.
45. The interest rate will fall when the Quantity of money supplied exceeds the quantity of money demanded.
46. An increase in the money supply is likely to reduce interest rates.
47. Loans of the federal reserve banks to commercial banks are an asset of the Federal reserve banks and a liability for commercial banks.
48. The conduct of monetary policy in the united states is the main responsibility of the Federal reserve system.
49. The fundamental objective of monetary policy is to assist the economy in achieving A full-employment , non-inflationary level of output.
50. Open market operations is a tool of monetary policy for altering the reserves of commercial banks .
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